Housing Market Showing Signs of Improvement: Is Your Credit Union Ready?

While few are comfortable making long-term predictions on the housing recovery, given today’s delicate economy, there have been positive signs that the real estate market is improving. Both credit unions making mortgage loans and their members needing them should take this as good news … with a dose of caution.

Among the many sources that have reported encouraging factors within the housing market:

• The National Association of Realtors® data show sales of existing homes are at their highest level since November 2009, and the last 15 months have shown year-over-year progress in median home prices. Its chief economist, Lawrence Yun, calls the housing numbers “overwhelmingly positive,” but warns that new home construction must pick up pace to keep the number of available homes in check.

• According to the CoreLogic, home prices are rising and are expected to keep rising, although not at the double-digit pace recently reported in its Home Price Index. The company credits the increase to tight housing inventories and strong demand from buyers, and anticipates both home builders and people looking to sell will enter the market, attracted by the higher home prices.

• Data released by the U.S. HUD and the U.S. Census Bureau reflect an uptick in builder confidence. The number of homes under construction in May marked a 4-year high and construction permits for single-family homes have increased from last month.

At the same time, some experts are warning that rising mortgage rates may create bumps in housing’s road to recovery. Although rates still remain well below pre-recession years, today’s buyers are different from those purchasing before 2008. Rate increases – even slight ones – may make current potential buyers hesitant to act, and some still face challenges in securing credit.

But taken as a whole, these trends favor credit unions and their members purchasing homes. As more sellers list their homes to take advantage of improving market values, many will become buyers in need of a mortgage.  And with loan rates slowly creeping up, many home buyers are looking to purchase sooner rather than later. For credit unions with the right marketing strategy in place, there’s a great opportunity to provide homebuyers with the mortgages they need.

Make Marketing Matter

The sooner home buyers start to think of your credit union as the place for their home loan, the better. The home-buying cycle lasts 18 months on average,  so it’s important to let people know of your services early in this process. Consistent messaging and ongoing promotion is a common thread among credit unions successfully growing their purchase mortgage business. Many of these credit unions don’t just see themselves as mortgage providers; they are providers of real estate services. They enhance their programs to include services needed by those in the market for a home: access to MLS listings, agent referral networks and online articles about home ownership and maintenance.

The goal of your marketing strategy should be to keep your name and your services top of mind among members and potential members who want to buy or sell a home. Here are some tactics that can help:

1. Include home-buyer and home-seller tips in newsletters. 

Keep articles brief, and present the advice in lists for quick and easy reference. Ask members who recently bought a home to share their thoughts on ensuring a successful move.

1. Host real estate-related events, workshops and seminars.

In addition to providing information on your loan process, partner with area Realtors® to provide an overview of the local market, or invite a community police officer to share home-security tips.

1. Build awareness using your credit union website.

Use your website to promote your program with online banners and “click here for more information” buttons. Set up its own page within the site, and link in from the navigation bar.  

Most industry watchers agree it’s not quite time to claim the housing market has rebounded. But positive signs are becoming more frequent and people are taking notice – including your members.  It’s an opportunity that’s knocking for purchase mortgage growth. Is your credit union ready?